Welcome back! If you read Article 1: A Beginner’s Guide to How Blockchain Actually Works, we walked through what a blockchain is, how blocks form, and why decentralization matters.
Now let’s get a little more hands-on.
You’ve probably heard things like:
“Just send me crypto.”
“It’s on the blockchain.”
“Check your wallet.”
But what does that actually mean? What happens under the hood when you send a transaction?
This article takes you behind the scenes - from clicking “Send” in your wallet to seeing the transaction confirmed on a blockchain explorer.
Step-by-Step: How a Blockchain Transaction Works
Let’s follow a single transaction from start to finish. We’ll use a simple example:
You want to send 1 token to a friend using a wallet like MetaMask.
Here’s what happens behind the scenes:
1. You Create the Transaction in Your Wallet
A wallet is an interface that lets you interact with the blockchain. It stores your private key (securely) and helps you sign transactions.
You enter:
- Your friend’s public address
- Amount to send
- Optional message or data (depends on blockchain)
- The gas fee you're willing to pay
Your wallet then signs the transaction using your private key. This proves it came from you, without ever revealing your key.
📌 Signing means creating a unique digital signature based on your private key and the transaction data.
2. Your Wallet Broadcasts the Transaction to the Network
Once signed, the transaction is broadcast to the network. This means it’s sent to nearby nodes (computers running the blockchain software).
Those nodes check if:
- Your signature is valid
- You have enough balance
- The transaction is formatted correctly
If it looks good, they pass it on to more nodes - spreading it across the network, like sharing a file with everyone.
📌 Nodes are participants in the blockchain network. They validate transactions and keep a full copy of the blockchain.
3. The Transaction Enters the Mempool
Valid transactions are stored in something called the mempool - short for memory pool. Think of it as a waiting room where pending transactions sit before being added to a block.
Every node maintains its own mempool, but they’re usually very similar.
Inside the mempool:
- Transactions are ranked (usually by fee amount)
- Miners or validators pick from the top
📌 The mempool is like a “to-do list” for the network.
4. A Validator Picks It Up and Adds It to a Block
Depending on the blockchain’s consensus method, a participant is selected to propose the next block. This could be a miner (Proof of Work) or validator (Proof of Stake).
They:
- Pick high-fee transactions from the mempool
- Group them into a block
- Validate and order them
- Propose the block to the network
If accepted, the block is added to the chain - and your transaction is officially recorded.
📌 A block contains many transactions, plus metadata like timestamp, block number, and a hash of the previous block.
5. You See the Transaction Confirmed
Once included in a block, your transaction gets a confirmation.
Over time, more blocks are added after it - which makes your transaction harder to reverse. That’s why you’ll hear things like:
“Wait for 3 confirmations.”
“It’s confirmed on-chain.”
You (or anyone) can view it on a blockchain explorer like LiskScan or Etherscan. These tools let you search by:
- Wallet address
- Transaction hash
- Block number
A Real-World Analogy: Certified Mail
Here’s a way to picture the entire process using something familiar — mailing a certified letter.
| Blockchain Step | Certified Mail Equivalent |
|---|---|
| Create transaction in wallet | Write a letter, sign the envelope |
| Broadcast to network | Drop it at your local post office |
| Mempool | Letter goes into a mail sorting facility |
| Validator adds it to block | A courier picks it up and delivers it |
| Confirmed on-chain | Recipient signs for it, and delivery is logged |
Both systems involve signing, routing, validation, and a final delivery record.
Wait... What’s This “Gas Fee” I’m Paying?
On most blockchains, every transaction requires a small payment - called a gas fee.
You’re paying the network to:
- Validate your transaction
- Store it in a block
- Broadcast it across the chain
Fees vary based on:
- Network congestion (how full the mempool is)
- Complexity of your transaction (simple send vs smart contract)
- Priority (higher fee = faster confirmation)
On Ethereum, gas is measured in gwei. On Lisk, it’s based on LSK token units.
Here’s a quick comparison:
| Transaction Type | Typical Gas Fee (Estimates) |
|---|---|
| Simple token transfer | Low |
| NFT mint or marketplace buy | Medium |
| Complex smart contract call | Higher (depends on logic & storage) |
Tip: Always check the fee before sending - wallets like MetaMask show it clearly.
How Long Does It Take?
Transaction time depends on:
- The blockchain’s block time (e.g. Ethereum ~12s, Lisk ~10s)
- Network traffic
- Your fee
| Blockchain | Avg Block Time | Confirm Time (1 block) | Notes |
|---|---|---|---|
| Ethereum (PoS) | ~12 sec | ~12 sec | High usage = higher fees |
| Bitcoin (PoW) | ~10 min | ~10 min | Slower but more secure |
| Lisk (PoS) | ~10 sec | ~10 sec | Fast and energy-efficient |
More confirmations = stronger finality (i.e. harder to reverse).
What If Two People Try to Send the Same Coins?
The blockchain uses the nonce (a number that increases with each transaction) to prevent double spending.
If someone tries to send the same coins twice, only the valid transaction with the correct nonce will be accepted. The rest will be ignored.
Why Transactions Sometimes Fail
Here are common reasons a transaction doesn’t go through:
| Problem | Cause |
|---|---|
| “Out of gas” error | You didn’t pay enough to complete it |
| “Nonce too low” | Another transaction was already sent before this one |
| Stuck in mempool | Gas fee too low, not attractive to validators |
| Wrong network selected | You sent tokens on the wrong chain |
Always double-check your settings before hitting Send.
Can I Try This Myself?
Yes, if you’re curious and want to see this in action, here’s a safe, free way to experiment using a test network.
- Install MetaMask browser extension
- Create a new wallet and save your secret phrase securely
- Add Lisk Sepolia as a custom network
- Get free test tokens from the L2 Faucet
- Use MetaMask to send a small token to yourself
- Go to LiskScan and look up your wallet address
- See your transaction as it appears on-chain
This gives you a hands-on feel for how blockchain transactions work.
Or, if this still feels early, you can just keep learning. Later articles will help build your confidence.
What’s Next?
In the next article, we’ll zoom in on the tool that starts it all: the wallet. What actually happens when you create one? How do public and private keys work? What’s a seed phrase? And how do you keep it all safe?
We’ll explore the different types of wallets, how they protect your crypto, and the most common mistakes beginners make.
I’d really appreciate your questions or feedback. Did something confuse you? Let me know. Your insights help shape the next articles.
Also, if there’s a non-Web3 topic you want me to cover (open source, side projects, etc), drop a comment below. If I know it, I’ll write about it. If not, I’ll point you to a good place to begin.
🤝 Stay in Touch
- Follow me on GitHub for projects and experiments
- Connect with me on LinkedIn - I’d love to hear from you
- Drop a comment or message if something clicked or confused; I read all of them.
See you in Article 3.
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